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The Department of Business, Energy and Industrial Strategy has published a press release revealing the excuses made by some employers for not paying the National Minimum Wage (NMW) or National Living Wage (NLW).

Employers investigated by HM Revenue and Customs (HMRC) told officials that they thought they did not need to pay NMW to foreign workers; that they did not need to pay shop staff when there were no customers; and that one worker should not be paid NMW because “she only makes tea and sweeps floors”.

In the press release, Business Minister Margot James echoed the government’s pledge to crack down on employers failing to pay NMW by stating “there is no excuse for not paying staff properly”. This follows the announcement in the Autumn Statement that there would be an increase of £4.3m to HMRC’s enforcement budget, on top of the £7m increase announced in April 2016. This year will also see the introduction of a new £1.7m advertising drive to encourage workers to check they are being paid at least the NMW.

With the NLW set to increase from £7.20 to £7.50 in April 2017, the message from the government is clear – ensure you pay staff at least the NMW or face investigation by HMRC. It is not always easy to work out whether staff are being paid the correct NMW and if in doubt, you should seek advice from an employment solicitor. However the following steps should help you to keep on top of NMW obligations:

Check that you are paying NMW to everyone who is eligible; this includes those classified as ‘workers’ as well as employees;

If an employee is aged under 25, diarise their birthday as the NMW varies depending on age;

The NMW increases annually so make sure you keep up to date with the new rates so that you have time to administer payroll changes before the increased rates come into effect;

Some employee payments such as expenses, tips and loans by the employer do not count towards NMW so ensure you understand what counts and what does not;

Keep an accurate record of the hours worked by your staff.

For a lesson in what not to do, the full list of employers’ excuses is set out below:

The employee wasn’t a good worker so I didn’t think they deserved to be paid the NMW.

It’s part of UK culture not to pay young workers for the first 3 months as they have to prove their ‘worth’ first.

I thought it was ok to pay foreign workers below the NMW as they aren’t British and therefore don’t have the right to be paid it.

She doesn’t deserve the NMW because she only makes the teas and sweeps the floors.

I’ve got an agreement with my workers that I won’t pay them the NMW; they understand and they even signed a contract to this effect.

My accountant and I speak a different language – he doesn’t understand me and that’s why he doesn’t pay my workers the correct wages.

My workers like to think of themselves as being self-employed and the NMW doesn’t apply to people who work for themselves.

My workers are often just on standby when there are no customers in the shop; I only pay them for when they’re actually serving someone.

My employee is still learning so isn’t entitled to the NMW.

The NMW doesn’t apply to my business.

For any advice or if you want to check that you are paying NMW, contact our specialist employment team on 01392 207020 or e-mail employment@tozers.co.uk.